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tv   Closing Bell With Maria Bartiromo  CNBC  March 19, 2013 4:00pm-5:00pm EDT

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best and worst performers for the dow today, coca-cola has been the best performer. caterpillar, which has been lagging, is the loser today. adobe systems will have earnings after the bell. they're reporting 39 cents profit on revenue of $906 million. >> it's an important story, because that's going to give us a story of whether individuals and companies are putting people to work. it's not just about the adobe business, but it gives you a bigger window. you know, bill, my question as we continue to see this market, a teflon market, is how much of this is short covering, how much of this is actual new buying coming in. terry dolan, what do you think? >> i think you've seen some last-minute covering, if you will, final hour, short covering. i think people thought that the cyprus thing was going to get some legs to it. and i think that they were very cautious coming into the day after the news broke, sort of played a little short game. the market rallied, nobody wants to go home short in this market right now. >> well, we know that the
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european debt crisis still knee deep in the red and a major issue, but u.s. domestic issues have really been driving this market. does that continue or are we focused now on europe? >> good home building numbers today too. >> that too. we're in a niche market. the u.s. has had their economy outperform other economies and i think it's a flight to safety relative to the u.s. markets on one hand and it's an unwind from the bond market and risk exposure going forward to rate changes on the other hand. so it's both a flight to safety as well as, you know, what's really going on domestically and people are looking at a twist now with the fed and what their posture will be heading forward. >> i'll be back, adobe earnings at the top of the hour. >> take care, maria. >> what do you think? we're finishing positive here. this market doesn't want to go up? you think some of that's short covering? >> i think that's what we're see right now. finishing up the day. right now people will have to play it cautiously. we haven't seen the end of the cyprus thing. we have some negotiating going on from russia. the impact of that, as you mentioned, is a little minor relative to the size and scope
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of them, but it's whether or not that moves into italy, spain, as we've all been talking about. >> the contagion. thanks, terry, good to see you. looks like we will finish positive, so we will not get three consecutive down days, which hasn't happened yet in 2013, as we close out this tuesday in this day of march. stand by. we've got the adobe earnings coming up on the second hour of the "closing bell." and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo at post nine, floor of the new york stock exchange. a late-day comeback here on wall street, helping the dow avoid the first three-day losing streak of the year. we are actually in the plus column. the dow jones industrial average reversing earlier losses, up about five points a to the close, 14,456. last trade on the dow, volume, well, not great today, once again. nasdaq and the s&p 500 down, as you can see, by a fraction. about eight points low eer on t nasdaq and the s&p 500 giving up
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364, about 4 points lower. so the cyprus risk finally creeping into investor minds? joining us right now, cnbc contributor, carol roth. she says cyprus is totally irrelevant to u.s. investors. but what does the rest of our panel have to say? jeff korznick, and mike santoli of yahoo! finances. cyprus doesn't matter? >> no. this is an anomaly of a situation. it doesn't mirror what's going to happen in the u.s. or really anywhere else in europe. and so i think that the market is really viewing this as an anomaly of a situation and it doesn't seem like anyone really cares. >> what's your take? >> i'm with carol. we're going to shrug this off as well. the gdp of cyprus is roughly the same as boise, idaho. it's not a huge risk for the markets overall. >> i guess the bigger issue is,
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are the headlines coming out of cyprus a recipe for other economies in terms of that whole business, in terms of taxing depositors, and we know that we continue to have issues in terms of the debt crisis. we are not, necessarily, seeing solutions there. >> i think you see -- if that fear were true, you would see it reflected in the peripheral european countries. i think they mark scyprus as a special case. >> mark, how are you investing at this point? you've got $54 million under management there. you've been bullish. do you want to put new money to work here, even though the market is up 10% year-to-date? >> short answer, yes, maria. the fact of the matter is, we think the fundamental underpinnings, particularly domestically, continue to be encouraging, and we're encouraging investors as a result of some of the volatility we've had in non-u.s. equity markets, to begin the scale-in there as well, because we think valuations are even more attractive.
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but i do think this cypresicyprg could be a big deal. the precedent it could set relative to marketdowns of small account deposits in other peripheral countries, particularly spain and italy. and the last thing we need to see is a run on the bank in those country ifs the ecb is still acting cautiously with regard to opening up his balance sheet to support these countries. >> which is why the market's reacted the way they did, by the way, when that plan was first floated on monday. so, i guess, mike santoli, you know, this market's looking for an excuse, right? investors out there, they know they've made money, and so maybe it's this tiny island country in the mediterranean, but they're looking for an excuse to see a market come off of highs. >> yeah, that's what we've seen. we were almost perfectly set up going into the weekend for something tangential that we didn't see to actually upthend idea that we have these ultracalm markets and no real threat to the upward pass. i do think it's kind of impressive on one level that we have just chopped around for a couple of days, as opposed to giving up much of those gains.
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but i don't really love the short-term risk/reward. mark just mentioned the deep underperformance of the emerging markets, everything related to global growth is on its heels. and yet the u.s. market continues to march higher. i understand the reasons for that, domestically, we're stronger here. we are an attractive place to put capitol. but i do think at some point that relationship gets stretched and it's unclear exactly how you reconcile those things. >> we've got earnings coming out in the next two weeks. that's really going to be setting the tone for investors in terms of really taking us on another leg up or reversing things. what are -- what's the panel expecting in terms of earnings? >> we think it will be a fine earnings season, but i think the markets are focused on the longer term, more than this earnings. we know the first quarter has shaped up to be a little bit better than people thought. second quarter will probably be weak from sequester impact, but they'll look beyond. >> what do you think, carol? >> i think that in terms of earnings, we've had expectations
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come down a little bit. i think it will be easier for them to get over that bar that's not as high. the one thing i do know with certainty, though, maria, more than earnings, there's a lot of debt out there. there's cheap debt and there's easy debt. and that means that m&a is going to be fueling certain parts of the market. so in terms of my own strategy, i've been looking at sectors to find the opportunities where those buyouts might be happening. >> so you really want to look for companies that are perhaps going to get a buyout or get pressured to consolidate, in an economy where debt is obviously the big story out there. >> retail being a huge sector. if you look across retail, there are a lot of companies trading at five and six times their ebitda multiples. if you're getting money for deals, that's about six times leverage on deals, that's a really good trade for a financial engineer. >> mark, what do you think, in terms of deal flow? does that play into how you allocate capital today? >> well, we're not trying to take advantage of what might be the next acquisition target, but encouragingly is the increase in
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m&a activity. i think that's a bullish signal, if it continues at the pace we've seen here during the first couple of months. the other thing we're looking at is not so much earnings, but rather, what kind of data points we're going to get out relative to the consumer. the first couple of months haven't given us much indication as to the payroll tax holiday expiration and the sequester cuts and what kind of impact that might have. and that might be happening in the next couple of weeks to couple of months and that might be leading to some kind of summer swoon in equity prices in investors begin to worry about fundamental profitability in the u.s. that's sort of a sidebar we're watching, almost contemporaneously to earnings announcements. >> so mark, what are the leading sectors you're investing in right now? >> we like some of the global activity sectors, frankly. we're becoming more pro-cyclical, if you will, as opposed to defensive. because valuations, again, we think offer a tremendous amount of support. and if we see any kind of uptick in activity, let alone confidence restored in the current level of activity, that should be good for things like
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materials as well as industrial sector. in addition, energy continues to look attractive. so, again, a very pro-cyclical stance, but one we think is very appealing from a value situation standpoint. >> okay. and in terms of sectors leading growth, same question to you both. what do you think? >> we're going to add on to that list. things like the regional financials the that have exposure to the reshoring of manufacturing and the energy sector. i think energy drives a lot of interesting peripheral activity. strengthen the rails and other transports, we think will also be beneficiaries here, as well as infrastructure play as well as mlps. >> do you agree with that? >> i like health care, but i also like consumer, and even though the consumer doesn't have as much confidence as they had before, i think in terms of upside versus downside, that's a place that i'm looking. and when you have a company like footlocker that's trading at 5.5 times ebitda, how much lower can it really go? big lots, same thing. there are a lot of these names that have been beaten up that don't have a lot of downside
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risk, that have a lot of upside potential, so that's the game i'm playing. >> mike santoli, where has the leadership been so far in this economy? is that the same leadership you think that takes place second half? >> not economy, not necessarily. i think we need to see the capital spending beneficiaries do well, in addition to the transports that have been leaders right now. one area that's interesting in terms of a risk/reward is what i call old tech. it worked for a while, things like intel getting on a good run. we have this zeal for bond equities. i think old tech falls in that category. it's not an economic leader, but something that i think is underexplored by a lot of investors. >> and are you avoiding any areas, mark? i know earlier you mentioned you're still a bull, although things are getting a bit stretched in some corners of this economy. >> maria, some of the classic defensives, consumer staples, even utilities, telecommunications, to a agree, even the consumer discretionary space, for the reasons i mentioned earlier. i think you can pick your spots in that area that is
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discretionary, but in the aggregate, those four sectors to us all support very high valuations and i think you need earnings to come through to support current share price levels. >> did you see any activity today that was notable? i thought the wild trading was something to take note of, given the fact that we were lower earlier, and then in about a two-minute period, the market completely reversed course, came back, and then traded down again. >> well, maria, from my standpoint, i think it was just sort of shoring up at the close, covering shorts and what not. i don't take much away from it other than the fact that if the ecb is going to step in and be the backstop, the lender of last resort to cyprus, that would be a very positive indication, because so far the ecb has played sort of a backstory role to the activity of the other components of the troika, the eu, and the imf. so that would add a lot of stability, and i think as a consequence, raise consumer confidence about the european situation. >> real short coverage. >> it's been years since we've
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seen inflows into equity funds on a steady basis. maybe we've turned that corner. certainly, the last several weeks have suggested that we've got money coming into equities from even the retail investor and mutual funds. that could be a game changer. >> we'll leave it there. thanks, everybody. great conversation. we appreciate your time tonight. and we will see you soon. thank you very much, mike and mark as well. photo finish for the dow, meanwhile, it closed a shade higher after seesawing near break-even in the final minutes of trading. the s&p 500 posted the first three-day losing streak of the year. josh lipton running through the day's winners and losers. >> let's drill down into the day's notable losers in today's session. we'll start with your biggest gainer in the s&p 500, wall green, which signed a ten-year deal, taking up to a 23% stake in the distribution company, and ending its current contract with cardinal health. also gaining in today's session, the home builders on that better than expected housing data we saw, building permits rising to the highest level since june 2008. kb home, toll brothers, and
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hovnanian, all finishing in the green. some records also hit today, honeywe honeywell, united technology, and travelers hitting all-time highs. and cliffs natural resources, we have seen general weakness in iron/ore pricing over the past week or so, when iron ore gets low, it can mean rough sledding for cliffs. also, electronic arts getting hit today. it was your worst performer in the s&p. the company expects revenue and earnings per share at the current quarter to be at the low end of or slightly below its year end forecast. harley davidson, no easy ride today for hog. retail sales for january and february may have been down 4% to 5% 7. and adobe systems just out with
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earnings, beat on the top and bottom line. that stock spiking in the after-hours. back to you guys, maria. >> thank you so much, josh. and as you just mentioned, adobe up better than 5% after report earnings that beat expectations. take a look at the chart. right after the break, we will take you live to adobe headquarters in san jose, dig into the numbers with an exclusive interview with adobe's ceo. later on, the nfl looking for a big score. the league's new $32 million investment fund looking for companies to invest in. we'll find out where, coming up. stay with us. [ male announcer ] with citibank it's easy for jay
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welcome back. adobe systems on the move in the after-hours. let's head over to adobe headquarters in san jose, california, where jon fortt is standing by with adobe's man in charge. over to you, jon. >> reporter: thanks, maria. adobe definitely beat on top and bottom lines. wall street was looking for revenue around $986 million, eps of 31 cents. adobe did better than $1 billion in revenue and 35 cents. here with shantanu narayen. tell me, what particularly outperformed in this quarter? i know you're doing a transition suite to creative cloud and you
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expected revenues to maybe not be as good as they were. how did they turn out so good? >> well, the entire business, actually, jon, did really well. q1 was a great start to the fiscal year. and as we talked about our two growth objectives, on the subscription side with creative cloud, they exceeded our expectations. and in digital marketing, which is the new area of business for adobe, we grew bookings over 25%. so great strength in both our growth objectives. >> and before i throw it back to maria, what kind of growth rates should we expect going forward for creative suite and for digital marketing? >> well, in digital marketing, we've said that we expect to grow revenue over 20%. and bookings over 25%. we've built a $1 billion business from scratch in a few years. and in the creative business, this year, as we said, is the heart of the transition. and we expect to end the year with $1.25 million subscribers, which would be pretty incredible, given we only released the product last year.
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>> that is extraordinary. mr. narayen, let me ask you about the smartphone opportunity. it seems like that really is the big opportunity. so where does the growth come from now in the smartphone market? if you could look geographies as well as real growth rates in that particular area of business? >> well, in the creative business, maria, the growth is actually coming from attracting a whole new set of creative professionals to our particular platform and making it far more predictable. we've seen that, you know, we expect to see significant new unit growth and we saw that in fiscal 2012, we also saw that in the first quarter. so we're growing new units, as the explosion of data continues. and i would say in digital marketing, we're just at the beginning. this is going to be a multi-billion-dollar opportunity for adobe, with a leader and we're incredibly well positioned. and whether it's selling more products to existing customers, geographic expansion and innovation in new products, i
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think there's tremendous green field opportunity for adobe. >> so digital marketing -- and what about the geographies that you're seeing in terms of population growth, outside of the united states. that has to be an opportunity. >> it absolutely is. and certainly, the u.s. is ahead of the rest of the world in terms of digital spin and marketing, all being online. but you're right. i mean, whether it's in europe or whether it's in asia pacific, we just think there's going to be tremendous opportunity, as mobility and cloud take significant hold in those geographies as well. >> shantanu, i wanted to ask you, piggybacking on maria's question, last quarter we heard a lot of ceos talking about the lack of clarity in the global environment. i know a lot of the digital marketing dollars right now are based in the u.s. but these numbers seem pretty bullish to me. do you feel better or more cautious than last quarter when you look out at the rest of the year from here? >> jon, i think the macro trend
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is more spend is going to go digital. and when people talk about big data, we're the big data company for marketers. so as you talk about the hundreds of billions of dollars, where people are going to want to know what the return of investment is, there is no other company that's as well positioned as adobe, to really let them know how to spend that money and to accurately reflect what the return of investment is. so we think that the macro trends will fuel this business for many years. >> so what would be an appropriate growth -- yes, what would be an appropriate growth rate, then, for adobe? obviously, your stock is trading higher in the extended hours. a lot of people very pleased with the earnings results that we saw. is this sustainable, this year and next? what's the appropriate growth rate? >> well, we think the appropriate growth rate for the creative business, after we go through the transition this year, is a 10 to 15% counter. and we think the growth rate for digital marketing, maria, is going to be 25% bookings, even
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at billion-dollar run rates. so significant upside for us in both businesses. >> and you got significant competition in marketing. you looked at google, oracle, sales force, even ibm jumping in there. and they're coming at it from different entrenched spots in the enterprise, in retail. what's your pitch for how you beat those guys? because they've got a lot of cash and they do a lot of acquisitions. >> well, i think we're the leaders, john, and we have to continue to innovate. but i think, you know, the affinity that marketers have for adobe, we're such an entrenched part of the content life cycle, and so as they're creating these campaigns, we think that's the on-ramp from all of this digital spend. google's actually a partner, because we allow marketers to spend more money on surge, but there is social, there is display, there is video. and i would say that oracle and ibm come at it more from the point of view of i.t. we focused on the marketer, we believe we have the most comprehensive solution. and, you know, we're clearly in
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the lead. >> i know we're almost out of time, but i notice that you guys also put out a release saying kevin lynch, the chief technology officer, who came over, i believe, from macro media, quite a while back, is leaving the company. what can you say about that and who's going to lead adobe's technical efforts going forward? >> well, kevin's made many contributions, john, and you know, i'm really grateful for that. he's decided that it's time for his next adventure and we're on our own adventure. with respect to innovation, however, to answer your question, it's never been a better time to innovate. with the creative cloud and the marketing cloud and the convergence of these clouds, there is just so much excitement among the product teams here at adobe, because the canvas that they've had to experiment on and innovate on has never been greater. >> all right. we will leave it there. good to have you on the program, sir. thanks very much. >> thank you. >> we'll be watching. jon fortt, thank you. up next, lessons learned. how prepared are u.s. banks to withstand the latest shocks from
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europe's debt crisis compared to two years ago? you can't afford to miss this story, up next. and then later -- >> tracy to kids, tracy to kids, come in, kids. >> it turns out that comic street visionaries behind dick tracy may have had it right. the next big thing in tech may be right off the funny pages. details on that, next. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support, we help you shine every day of the week.
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more drama in cyprus to report a short while ago. banks in cyprus are still closed to avoid bank runs, since europe's debt crisis erupted two years ago, u.s. banks have pared back their european exposure significantly. kayla tausche mapping it all out for us. >> maria, the shocks in a potential euro zone flare-up would rattle the financial stocks, but not as much as it used to. that's because a year ago, u.s. banks started detailing their exposure to the peripheral european companies. greece, ireland, italy, portugal and spain, since then, that exposure has come down sharply, most sharply for bank of america. but at the end of last year, jop moregone, the largest u.s. bank by assets, also had the largest total exposure to the region, $27.7 billion. citigroup following shortly thereafter. but the filings for these banks show that for these two, at least, hedging offsets those risks by at least half. goldman sachs and morgan stanley, you'll see, the risk is much smaller, by extension of
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them being smaller companies. and all banks, as you mentioned, have moved to pare back this exposure substantially in the last two years. everyone, though, but italy. banks still have $16.5 billion changing hands with the government and the country's corporations. so what, then, for cyprus? well, bank sources i spoke to said u.s. financial giants didn't do business with cypriot banks or corporations if there's any counterparty trading risk. it would likely be negligible, unless, maria, the ripple effects from what we're seeing over there tend to widen. >> all right, kayla, thanks very much. we'll be watching that, obviously. what's ahead for cyprus right now? we are right now joined by george theocoritus. good to see you. we have, george, the professor of finance at cyprus international institute of management. he'll be joining us shortly, and peter kekyanus is the chairman of the cyprus chamber of
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commerce. i guess it's interesting that we see this plan unveiled on monday and it really creates a market upset. are you surprised at all that parliament rejected this depositor tax? >> not at all. i mean, when you -- >> it's crazy. >> it's more than that. i think there's something more being done here and said. not necessarily verbally, but if you look at, it started friday. effectively, the banks have been closed for five days. the chaos that that will cause to the cyprus economy, if it were in this country, alone, would be dramatic. >> how do you propose cyprus gets bailed out? >> well, i think, historically, in the bailout situations, all the other countries have been bailed out appropriately, meaning that the bailouts come from the european markets. here, unprecedented and contrary to the insurance laws, and the rule of law concept, they are taking the money from the depositors. what faith will they have now, aside from cyprus, what are the
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other member states and their deposits have to say? remember, the concept of the eu was to have a unified national union of sorts. in this country, if we had one state or one bank going under, we wouldn't expect all the depositors throughout the united states and every bank to contribute. on the contrary. >> now, i understand that about half of the depositors are russians. which is also interesting. >> well, and that's the backstory. >> give me the backstory. >> my interpretation of the backstory is, if you recall, the troika, sneao to speak, has bee looking for an alleging of laundering money. it's been going on, they've been looking for this and nothing's been found. it's like accusing someone of a crime and expended so much time and energy and not finding it and now they've got to extract some basis of retribution. >> so it's basically like saying, we know you've been money laundering and this country wants a bailout, so
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you're going to pay for it. >> remember, cyprus, one of the smallest members of the eu, is a financial center. and yet luxembourg is a financial center. hong kong, singapore, all are financial centers. the reason why this has come to the forefront is because they suspect, rightly or wrongly, investments by russians and other foreigners. it's not just limited to russians, a number of deposits, but money will flow where the best investments will be. >> of course. >> so punishing the cypriot depositors because of foreign deposits is unheard of. >> let's put that unheard of proposal aside for a moment. how does cyprus get out of this? >> well, i think, my suggestion would be that when the banks open up, that you go back to square one. i think that the euro group do what they're supposed to do and contribute the funds of $13 billion to $18 billion. and they've got to now go back and do damage control and incentivize the depositors not to withdraw their money. so there's going to be some program of clarity and transparency that if you stay in
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your bank, there'll be some incentive. i'm not sure how it is, but they've created this problem, and now they've got to fix it. if cyprus falls, then we're next. if we're the smallest, somebody else is now the new small guy on the block. >> let me ask you this, the cypriot finance manager is going to russia tomorrow. are you expecting putin to help out cyprus? >> i don't know the outcome, but i know, as you heard, that the russians are outraged, because the program as set up now is going to punish their depositors, unprecedently. i think that what should take place the the europeans should down with the russians and the cypriot government and work out a reasonable exit strategy for them. again, the investors here, the bond holders, the shareholders, should be the one who should take the hit. not if depositors. >> so should cyprus leave the eu? >> absolutely not. absolutely not. i think it's a bad precedent. >> maybe it's a bad precedent, but if they are not handling
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their finances, you know, in a conservative way and they have all this debt and need help, who's going to -- who's left holding the bag? >> wasn't that the argument made in greece? >> yeah. >> and the argument made in italy? and the argument made in spain, and in portugal? >> so they have to handle it together, is what you're saying? >> otherwise you don't have a union. a union is not just -- a union is for the good times and for the bad times. >> do you expect this to bleed into the united states' fortunes? >> if it gets out of hand, yes. but currently, no. >> well, what is characterized as getting out of hand? >> if the eu allows cyprus to go bankrupt. remember, there are some major oil finds in the area there. nobel energy is currently and has developed drilling wells there as well as a second tranche. the you start to defy the underlying credibility of the country and allow it to go bankrupt, who knows what aspect this will have on the american economy. if you look at it, europe has been lagging behind the u.s. and we've been very very proactive
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as a government in our money sectors, europe has not. doing what they're doing now, unprecedented, contrary to all aspects of the law, is going to create, i think, a dislocation that no one can predict. >> well, we're all connected. that's the bottom line. peter, good to have you on the program. >> thanks very much for your time. >> thanks very much for joining us. it is about time. samsung tossing its hat into the smart watch ring, to keep up with rival apple. regardless of who gets to the market first, will consumers latch on to a smartphone watch? and later, what do professional football players and private equity geeks have in common? nfl executive eric grugman speaks with me about the league's latest multi-million dollar partnership and where they plan to put money to work in a few minutes. stay with us. your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends,
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okay. [ male announcer ] with citibank's popmoney, dan can easily send money by email right from his citibank account. nice job ben. [ male announcer ] next up, the gutters. citibank popmoney. easier banking. standard at citibank. welcome welcome back. samsung says it's developing a so-called smart watch. this on the heels of rumor that apple is working on its own version of a wearable gadget. can samsung pull it off? and who would want a smart watch? who is that appealing to?
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ben baharon is with me, but roger kay has his doubts. roger, you don't think a smart watch is something that will really catch on. why? >> well, maria, people have stopped wearing watches about five years ago when they started using their smartphones. and unless it's a piece of jewelry, mostly people would rather just use their phones for now. >> ben, what do you think? >> i think there's a couple things. i think that, you know, thinking about this as a watch is probably the wrong way. if you look at something like the nike fuel band, it has time keeping capabilities in it, but it is not actually a watch. it's just one feature of that. i think the value proposition is more, you know, in lines with what wearable computers mean for us in the future and this just happens to be one that's worn on our wrist, and probably isn't, you know, actually a phone, but more of an accessory to our smartphone. >> but what about what roger says. people stopped wearing watches. >> i think we're seeing -- >> go ahead. >> go ahead, roger. >> well, no, i just think that having something on your body,
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that's kind of strapped to your body is not always comfortable. people do wear jewelry. i think that the high-end, you know, those kind ofch wh watche about people showing something. it's part of an accessory. but i don't think this is the same thing. as ben pointed out, it's kind of a peripheral to a computer. it's glanceable information and there's some use in that. but i think you have to change people's behavior, and people haven't really got a way of doing this yet. i'm not sure people are really going to adopt it. >> yeah, and i think that the flip side of that is that, you know, we're seeing these wearable sensors really take off. whether that's the fit bit or the nike fuel band, but the value proposition, again, is not keeping time. it's something much broader than that. and so i think that as this category takes off, as we think about, there's only so many places we can wear something like a wearable computer, that the wrist becomes a great spot to do that. how it manifests itself may be very different from a proposition than a watch, but i think there's a lot of life to
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the kind of things we can do with these, even if it's just glanceable data, elements related to health or interaction with our other gadgets. i think this is part of a broader now wearable trend that we're starting to see commercialized. >> well, that's different. that's just a whole new category. wearing something where you want to check your stock quotes or check headlines. that's a different scenario. it's not just necessarily a mobile phone. >> right. >> an auto phone. in the sense, it's probably not really a phone. i mean, it might be a phone, in the sort of dick tracy type phone, but that would be really not its primary function. >> right. but how big of an opportunity is this, really? i mean, you're going to have lots of add-ones, right? years ago, motorola came out with those sunglasses that you could use as a fun. is this really going to move the needle in terms of earnings and revenue for these companies, samsung in particular? >> one of the important things about -- one of the important things to laook at this in term
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is not just the one category by itself, or how someone like samsung or apple or motorola uses this as an incremental growth to the things they're already growing in. and i think the market size is so big and so vast at this point, it's about creating new things that go in line with one company's, you know, individual ecosystem. and that's why i think this wearable accessory trend is becoming interesting. >> what about that, roger? >> well, you know, i think that ben lives in silicon valley and a lot of people there are probably looking at stuff like this. the rest of the country may be a ways behind. on the other hand, as he pointed out, this could be a channel for pushing the ecosystem of a particular vendor like apple. it could be interesting for some people. but some of the numbers i've heard, like $6 billion for each of those companies, samsung and apple each, a $12 billion market here, that sounds pretty high to me, so far. so i would like to see a little bit more of how this is actually going to work and whether real people want to use it. we have had some evidence that these products have been put in market and taken out again for lack of interest.
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so i would like to see real people adopt it, and not just the people on 101. >> and real people, ben, how about young generations? is this going to resonate with young people? >> i think that's one of the key things to look at here. roger's right, there's a difference between what the market will be today and what the market will be tomorrow. and i think what's interesting is when you look at these devices and we think about what generations or what people groups, even globally, right, in china and india, where young generations are being exposed and growing up with technology, what are those solutions, what will computing look like for them? and i think it's going to go beyond just the few simple screens we have now, into a whole range of devices and gadgets and things that add to this digital ecosystem. but there is an adoption cycle. roger is right, but i do think that this will find some market penetration, even if it's just the early adopters, but i think it will lead to something bigger in the future. >> roger, i want to make this final point. go ahead? >> i was just going to say that
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samsung did drop one of these into france years ago and pulled it out again for lack of interest. depends on how well it's done as to whether it's really going to be adopted. >> we'll keep watching, gentleman, thank you very much. interesting times we live in. we'll see you soon, guys, thanks. meanwhile, in professional sports, there isn't a bigger winner than the nfl, but the league's latest gamut is out of a new playbook. nfl executive eric gruben is with me, coming up, to tell us about a deal you won't find in the sports pages. later, will the dow lock in its second win in two days? wall street's top market pros will give you a leg up on the action. back in a moment. nt. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet...
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4:46 pm'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ welcome back. it is not uncommon for a $9.7 billion business to make new investments, unless that business happens to be a professional sport. the national football league is teaming up with providence equity partners to create a new investment partnership. they'll have about $300 million to invest in start-ups that focus on sports, media, and technology. eric grabmeni joins us now exclusively to talk about this new partnership. eric, good to have you on the program. thanks for joining us. >> thank you for having me, maria. what can i do for you? >> wlhat is the motivation? why is the nfl headed in this direction? >> well, the nfl is a big business, as you know, and there are different elements to that business. obviously, there's the football business, media, entertainment,
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marketing. lots of opportunities go by us. and we tend to be able to take advantage of them historically, when we have a partner and when we sign a long-term contract. it's always been a licensing deal. and there are a lot of opportunities with the changes in media and technology for people to invest. so we wanted to have that opportunity to try to get into the investment business, and that's what this is all about. >> so, are there specific companies that you expect to be targeting? >> no. i would more at categorize it as the nature of the companies we would target. and we pick providence for an important reason, which is not to say we'll exclusively focus on media and technology, but that's a lot of the things that we see. and it's some of the businesses that we know, reasonably well. we also operate a couple businesses in that arena. providence is very good in that particular set of opportunities and has been for many, many years. so this seemed like a natural fit for us to get started. >> and so when will the
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partnership go into play? what kind of areas are you most focused on? you said media and technology, because those areas lend itself, that's where you're seeing much of the deal flow. >> yes, that's right. the partnership is in effect. we've signed the deal with providence, and we don't need to hire anyone or have a start-up ourselves to be able to do this. it's really a form of an investment partnership. so i think that simplifies it and demystifies it. you know, i use the word technology and media, those are really very broad. and many people who are investors and listening to your show understand that that can mean everything to a smartphone, or as your prior guests were talking about, a new wrist device. and there are lots of those things. and they touch our business. and with the advent of the digital world, more content touches more devices in more places. we're a content business. and so we think there are a lot of touch points that could be
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interesting to invest both in america and elsewhere. >> eric, are you going to be bringing in outside managers to manage this portfolio, to be picking some of these investment ideas, or is this an in-house endeavor? >> no, we don't anticipate doing that. the beauty of this arrangement that we have with providence is that we'll use their infrastructure to look at the investments, to make decisions about the investments, and then once something, with an investment is made, they have people who are able to manage those portfolio companies. now, if a given company is doing well and is connected to the nfl business in a more specific set of ways, perhaps a licensing arrangement or something else, then we'll get more involved, as we do with our partners today. and we already have people who are capable of doing that. that's not to say that we'll never hire anyone, but we're going to walk before we can run. >> that where providence comes in and their expertise?
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what does providence bring to the table? because you just said it. you're the condition tent busine business, you're the brand. >> yes, but we're good at the entertainment business and managing that. we're good at the football business and managing that. and we know a couple of the constituent media businesses, nfl network, are great examples of that. but there's an awful lot of things that we don't know. and most importantly, we don't know how to be an investor. that's a different set of qualifications and experiences and although i have a finance background and have spent some time myself in financial services, i wasn't an investor. no one really in our shop is. so that's what we have providence or somebody like providence for. and then the specific choice of providence is because they're already -- invested in a lot of the areas that we're interested in. >> absolutely. no, i think it's a terrific idea. let me ask you about the profits here, as you get some returns, which hopefully you'll make some money on this. does that get redistributed to
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nfl owners? does that go back into the fund in terms of dividends to invest more? what's the vision in terms of what happens to the money? >> well, it's -- that's a great question. at the nfl, what happens to the money is a question that's always up to the owners. and so what we'll do is if this investment opportunity, if this particular thing that we gauge in is successful, i think it's probable they'll want to keep going and perhaps get bigger. but we'll wait to see what happens in that regard. the specific answer to your specific question is, if profits are generated, they'll go back to the investors with, and the investors are the owners. >> all right. we'll leave it there. eric, best of luck with that. we'll see you soon. we hope you come back to give us an update on the investments. >> okay, maria. thank you very much. >> we'll see you soon. eric grubman joining us, the executive vice president, nfl ventures and business operations. what will move your money tomorrow morning first thing? we are on it. we've got our trio of wall street's top stock jocks weighing in. back in a moment on "closing bell." neil and buzz:
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30 30 seconds on the clock for each guest. dean from brook stone capital management. dan from channing capital markets and dan hill from
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freedom financial group. gentlemen, good to see you. dean, what do you want to be prepared for tomorrow? >> thanks, maria. of course, all eyes are going to be on the fed. any good news coming from the fed may be bad news for the economy as it may price in the potential for diminishing qe activity in the future. this market is supremely addi addicted to the accommodative policy the fed has been pursuing. fedex announces earnings tomorrow. normally a great barometer for economic activity and potentially a market mover. >> dan? >> yes, certainly aside from the fomc, we're watching some earnings releases. also, oracle comes in after the close. general mills before the open. these aren't huge movers in terms of contributors, but i think oracle tributed about 8%,
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so i think anticipation with how they report could move the market, especially technology relative strength of that sector. >> we'll be watching that as well. last but not least, ted, you are up. what do you want to be watching tomorrow? >> really two things. the fomc meeting and cyprus. i don't expect any surprises from the fed. i think the hawks may have their day, just not tomorrow. now, on cyprus, they voted on the levy and the uncertainty could cause weakness for markets, but we've seen good economic data, to i'm looking at that as a buying opportunity. >> we'll be watching that. of course, this whole market has been buy on the dip for a while. thank you very much. we'll see you soon. take a short break and my
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